The Higher Education Student Assistance Authority (HESAA) would be required to establish an income-based loan repayment option as well as a loan rehabilitation program under legislation sponsored by Senator Robert Singer (R-Monmouth, Ocean.) The bill, S-2573, has cleared the Senate Budget and Appropriations Committee.
“Borrowers who are committed to rehabilitating a defaulted loan should have the opportunity to do so,” Senator Singer added. “That’s why the program established under this bill is so important. No one should be forced to declare bankruptcy at the age of 26 to regain some semblance of financial stability. Requiring HESAA to notify national credit bureaus once a loan has been rehabilitated will ensure the agency keeps its promise to those borrowers, too.”
HESAA needs to start keeping its promise to treat borrowers fairly. This bill will make sure they do. https://t.co/Yxnz11fmbg
— Senator Bob Singer (@bobsingernj) October 13, 2016
Senator Singer’s bill, S-2573, requires HESAA to establish a program for the purpose of rehabilitating a defaulted NJCLASS loan and removing it from default status. Under the bill, HESAA would be required to notify national credit bureaus that the loan is no longer in default status within 30 days of the borrower’s successful completion of the loan rehabilitation program.
S-2573 also directs HESAA to establish an income-driven repayment option for an NJCLASS Loan Program loan. Monthly payments would be limited to no more than 15 percent of discretionary income. Borrowers who live below 150 percent of the federal poverty guideline would have $0 monthly payments.
“College students should be focused on finding a career that will allow them to gain financial independence,” Senator Singer (R-Monmouth, Ocean) added. “Instead, more and more graduates are using their hard-earned dollars to climb out from under a mountain of debt. Requiring HESAA to establish an income-based loan repayment option will enable recent grads to funnel the money they can afford to spend on a starting salary back into the local economy.”